No Surprise: Mortgage Employment Falls

Mortgage companies dropped 8,400 full-time employees from their payrolls in October after mortgage originations fell to an eight-year low in the third quarter. The U.S. Bureau of Labor Statistics reported that employment in the mortgage banker/broker sector fell to 343,400 positions from 351,800 in September, a 9% decline from a year ago. The mortgage industry took its biggest job hit in 2007 when 110,000 workers lost their jobs or left the industry. Friday's job report shows "we are the deepest part" of the recession, said Brian Bethune, chief U.S. financial economist at IHS Global Insight. The overall U.S. unemployment rate rose to 6.7% as 533,000 workers lost their jobs in November. Although the government's response to the financial crisis came six to 12 months too late, said the economist, he expects mortgage rates to fall below 5%, and spur a surge in refinancing activity. "It is going to get hot," Mr. Bethune said. But he warned there will be a "huge bottle neck" because the banks don't have people in place in process the applications.